by Kyle Swartz
Major changes in the alcohol industry were top of mind for attendees and panelists during the 2025 NABCA Admin conference in October. Topics included sales declines, cannabis beverages, Gen Z drinking trends, the impact of GLP-1 drugs and more.
Each year, Admin takes place in the chairman’s home state. Thus, the setting in 2025 was Bethesda, MD, for Chairwoman Kathie Durbin, Director of the Montgomery County Department of Alcohol Beverage Services.
Panels at the multiday event focused from the get-go on the ongoing industry pullback. “The growth that many experienced in alcohol during Covid has dipped dramatically,” said moderator Maggie Barchine, Director of Communications at NABCA. She led the panel, Navigating Today’s Economic Landscape.
“Competition for the consumer spend has gotten more and more difficult . . . as consumers in markets worldwide say they’re pulling back on spend on alcohol,” said panelist Marten Ladewijks, President, IWSR Americas. Due to inflation, tariffs and other economic factors, “there’s greater pressure on [consumers’] discretionary wallet. And there’s different direction of their spending, with pressure from different categories, like cannabis, online gambling, and where they spend their time socially, digitally, where there’s no alcohol.”
Premiumization remains a dominant trend in alcohol, but has seen consumers shift.
“Premium outperforms mainstream, but consumers are switching from categories with higher out-of-pocket costs, like spirits, to categories with lower out-of-pocket costs, like RTDs and beer, and then they premiumize within those categories” Ladewijks said.
Globally, RTDs remain the only category in growth mode, he added. “Consumers increasingly prefer pre-dinner drinks to post-dinner drinks, because pre-dinner drinks are cheaper and easier to control how much you drink,” Ladewijks continued, which again benefits RTDs and beer over spirits and wine. A graph he presented showed that the rise in RTDs correlates with the decline in wine.
Ladewijks predicted that alcohol sales declines will continue for five to six more years, before leveling off in 2030.
The subject of consumers watching their wallets went hand in hand with the question of why Gen Z reportedly spends less on alcohol than other generations. Many reasons have been proposed: Gen Z is health conscious, never leaves the house, frequently gambles online, regularly consumes cannabis, etcetera. However, several presenters pointed out that the percentage of active alcohol drinkers among Gen Z is similar to other generations, while Gen Z spends a similar amount of their discretionary budget on alcohol. So what gives? The likely answer: Money.
“A lot of it comes down to money,” said Andy Deloney, DISCUS SVP and Head of State Public Policy, during the panel, Where Have the Sales Gone? “Gen Z doesn’t really have the money yet,” because they’re still so early in the professional careers, where they’re not yet high earners, and can carry a lot of college debt. (Moreover, a good chunk of them are still teenagers.)
“It’s not that Gen Z doesn’t spend as much on alcohol, but they actually spend relatively the same percentage of alcohol,” Deloney explained. “The same percentage of a smaller pot is not going to be the same percentage of a larger pot.” Especially when compared with Boomers, which are the wealthiest generation in American history.
Naturally, Gen Z will not remain at the bottom of the workforce forever. This could bode well for the industry’s economic fortunes in the future. “As Gen Z get on their feet and start making more money and move forward, there’s data to support the argument that they’ll become stronger alcohol consumers than they currently are,” Deloney said.
The rise of GLP-1 weight-loss drugs was another headwind much discussed for negatively affecting alcohol sales.
“GLP-1 drugs have had a small but measurable drag on alcohol,” said David Jackson, NABCA SVP Trade Relations, during the same panel. “Fifty-four percent of adults drink, and of those, six percent are GLP-1 users. Of that six percent, 45 percent of GLP-1 users say that they have started to cut back on alcohol. That represents about one percent of beverage alcohol sales, or about 8,100 9-liter cases of spirits every day.”
“It’s not that dramatic, but it’s something to look at,” he continued, adding that these numbers were before GLP-1 drugs become generically available and cheaper to buy — meaning more trouble may lie ahead here.
Painting a rosier picture on the panel was Lester Jones, NBWA VP Analytics and Chief Economist. “I’m not convinced that the sales aren’t coming,” he said. “The data shows that the economy is strong, and people of all ages still want to go out and spend money on alcohol. We still want to be together. Socialization, being together, is what we want to do.”
“The data shows that there are more active drinkers now than there were 10 years ago,” he continued. “The problem is fragmentation. People are looking for more things, new places to shop.”
Like other panelists, Jones believed the bigger issue with younger consumers was money. With inflation and tariffs raising prices, Gen Z and Millennials have cut back on spending, and are less likely to buy multiple drinks on one occasion. But because they still want memorable experiences. “This is an occasion problem,” he said. “Figuring out where the people want to be is our problem.”
To that end, his fellow panelist, Steve Gross, Wine Institute VP of State Relations, echoed the need to connect organically with Gen Z. “Younger people do not feel part of the wine business,” he argued. “They feel like it’s stuffy. They feel like it’s not relevant to their world.”
Pointing out that these consumers are digital natives, always online, he added, “We have to show up in their world, rather than wait for them to mature and join our world.” Accordingly, he described a big digital push by the Wine Institute for better category awareness online. “Unless we can convince 25- to 35-year-olds that we are relevant to them, that will continue to be a drag on us.”
Cannabis beverages were a category repeatedly recognized for their recent growth. During the closing panel on this subject, moderator Harrison Martingayle, NABCA Associate General Counsel, mentioned the ubiquity of the products among younger consumers. “Go to any college tailgating event in America right now and students 21 and up are all drinking these products,” he said.
Naturally, the demo is larger than that, with one audience member remarking how her 80-year-old mother was a fan of THC drinks. A panelist observed how his father-in-law, who abstains from alcohol, has become a frequent consumer of cannabis beverages. During a down period in the industry, here is an area where new consumer interest has driven growth.
Minnesota has become a hotbed for THC innovation in beverage alcohol retail stores, led by the Minnesota Municipal Beverage Association. Executive Director Paul Kaspszak said during the panel that some liquor stores have begun selling edibles as well, everything from gummies to cookies. Edibles now represent about 27% of THC sales for Minnesota beverage alcohol stores that carry them. But the big draw remains drinks.
“Liquor stores have become the largest seller of THC drinks,” Kaspszak said. “You can still buy them at dispensaries, but people gravitate towards the liquor stores because you have the larger selection there.”
“It’s a very profitable category,” he said. Kaspszak highlighted one store that reported a $150,000 gain in year-over-year sales after they began stocking cannabis beverages.
“THC beverages have a good markup,” he added. Some stores marked them up by 30% like beer, while others went as high as 50% or even 100%. “People will continue to buy these products no matter what the markup is,” Kaspszak said. “In Minnesota, you’re going to see liquor stores that have lower sales but higher profits because of these THC drinks.”
The category has proven so successful that the Minnesota Municipal Beverage Association has even canned their own house brand, Muni Sota. Additionally, consumers can now buy THC beverages at certain on-premise businesses.
“It’s not widespread yet, but it has saved numerous craft breweries,” Kaspszak said. “A lot of them have started to produce THC drinks. It’s keeping them afloat.”
Kaspszak believes that this burgeoning industry still has a long runway ahead.
“Public opinion on this is so far ahead of everyone in this room,” he said. “The public opinion is that drinking alcohol is bad, but drinking THC is good.”
“This is just like after Prohibition,” he added. “In 10 years, we won’t be talking about this like we are today, because every state system will have figured out what is best for them, whether that state is control or private.”
Which is to say that the category is growing fast, but would benefit from better, uniform regulations. This could help protect public safety and keep out bad actors. Echoing this sentiment was panelist Josh Miller, founder of the cannabis beverage brand Daizy’s Social Soda.
“We want more regulations and procedures across the board,” he said. “We want something that’s scalable, checks and balances that everyone can feel comfortable with.”
After a closing banquet that featured local Irish step dancers, NABCA Admin 2025 wrapped up, with next year’s conference slated for Mississippi. •